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Honda City: The New Heights of Excellence… Err… Pricing

Okay, so the new Honda City is out in Indonesia… Err… I wanted to pun about the new City is running around in the cities, but apparently it will not be the case for the longest time. As some has noticed (and taken it badly), the new City is priced at ridiculously-catastrophically-wallet-busting-high, towering more than 20% over its competitors, namely Toyota Vios, Suzuki SX4 Sedan (lovingly named Baleno locally), Chevrolet Kalos… And well, basically every small sedan out there.

The beard on fire joke maybe is overrated, but imagine this… A lot of people already pay a down payment for something that even doesn’t have a price! Now… Let’s think about it first…. Argh, just read through my silly writings. Witty comments in 3… 2… 1!

The new Honda City is officially priced starting from Rp. 239 million for manual version and as high as Rp. 260 million. Well, for the folks living stateside, the car costs a whopping US$20000 and topping US$23000 (current exchange rate) for the loaded version. Now why is everybody running around like they caught their beard on fire? Well, as most Asians, Indonesians are suckers for everything new (a.k.a. super early adopters)… That is, there are a lot of people who already pay the down payment for the new City even when they didn’t know the price… Now if that’s not a stereotype joke, I don’t know what is… Of course, much of Honda sales guys didn’t know about the price either as they really didn’t know even what the City would look like, so the silliness ensues.

People are targeting that even with Honda premium status, a new car will not be priced outside the “10% boundary” pricing wise against its competitors, or namely, the Vios here, as the reigning champion of small sedan. So, people expect the price at logically Rp. 210-220 million, as compared to Toyota Vios’s Rp. 201 million (fully equipped)… And you know what, the City is priced starting at 230 million. Still, it’s a little bit more or less on the target, but considering that the Rp. 201 million Vios is fully equipped, it’s starting to get hot in the competition, and in the people who pay for the down payment of the new City’s wallet.

People are accusing Honda Indonesia taking advantage of their “rising premium” status and jacking the price of the new City sky high. Well, perhaps those people are the one broken hearted as they couldn’t afford the new City, or just plainly uneducated… Bar none… I myself, is totally awestruck by the exponentially increased price… How? Why? But carefully thinking about it, it’s just too clear and easy actually, even my Honda crazier little nephew knows about it.

So why? Why indeed… Like my little nephew point to me, the new City looks like a totally new car… This is coming from a kid who said the last City and Baleno (Aerio Sedan) looked like a Jazz with ass and Aerio with ass… Really! He said that! A car with ass! Making sense of it all, the last generation City looks like the last generation Jazzz, with a trunk, a hatch with trunk, complete with gaudy rear end and questionable aerodynamics. Well, folks… BECAUSE IT IS! Last generation City took everything the Jazz/Fit is good for and added a trunk. The City’s front bonnet is sloped steep like the Jazz (from here on end, I will refer the Jazz to the Fit), making it look like, well, Jazz with less curve from the side profile… And with ass… I mean trunk. More over… The interior of the City looks exactly like Jazz! Once, I borrowed a friend’s City, as my prior car was the Jazz, I felt no difference at all between driving the old City and the old Jazz, and to put some insult… I almost rear end the car when backing up, because I swear, I thought I was driving a Jazz… You know, the car I had, has no ass… I mean trunk…

The original design for last generation Honda City… Short nose and long trunk…

Well, there’s no problem there in utility or cabin space. The last generation City is a haven to sit into, huge cabin space, tall, roomy, well, put every good spacious comments here and you have the last generation City. But all that goodness translates into something of an oddity. The tall cabin = tall car… A lanky design for a sedan… Why is it lanky again? Because the last generation City shares exactly the same A pillar from the last generation Jazz, the same tall A pillar that gives Jazz that small MPV looks… No wonder even a kid called it a Jazz with ass. Subjectively… The general public dish out on the last generation City styling, especially compared to the City 2 generation before (still heralded as the most beautiful City design).

So why the last generation City looked like a Jazz with ass? Well, this is called, platform sharing, the same as other Japanese automakers are famous for. The same as Civic is sharing its platform with CR-V, or Toyota Camry sharing its platform with Harrier/Lexus RX. However, it’s just too obvious and in ASEAN where the City is sold, sales are lackluster, because it just looks like a hatch with trunk. Honda even went the extra mile by (reportedly) making last generation City design refresh a costly one, changing the whole front side of the car.

But enough of that, now… Why is the new City costs literally an arm? Well, because my “Jazz with ass” nephew asked me… “is that the new Civic?” And you know what my reaction is? I TOTALLY LAUGHED!!! And gives a thumbs up to Honda design department, you’ve outdone yourself guys, the new City design is totally on the spot, it’s no longer a Jazz with ass, it’s now a proper small sedan devoid of clues from what car is derived upon. However things doesn’t bode well from pricing stand point… As you can see, platform sharing means sharing everything, from production to development cost. With the new City totally looks like a different car from the new Jazz, well, there’s bound to be something that incurs extra cost for the beloved H.

First of all, let’s take a look under the hood… Powering the car is the all new L15 engine, the freak 1.5L 120ps engine that debuted on the Jazz and just recently found its way on the new Honda Freed. Okay, let’s play count… That’s Jazz, 1, City, 2, Freed, 3… A grand total of 3 car that uses the same engine. Now compared with the old L15 engine that found its way on Jazz, Mobilio, Mobilio Spike, City, and Airwave, a complete line up of cars which warrants economy of scale. The new engine incurs new development cost, and also factory retooling costs for casting the new engine. To make matter more lively, Honda used an all new 5 speed automatic transmission complete with the black magic like grade logic control and turn shift (or whatever) technology… A 5 speed automatic transmission which has its competitions running dry (most of the competition still using “dumb” 4 speed automatic transmission, sans Toyota).

So under the hood, it’s a totally new experience. Compared to the same old VVT-I or the same old VVT of some cars (nudge*Toyota Yaris/Vios, Suzuki Aerio/Baleno/SX4/Swift).

Now, let’s take a look at the exterior side. Where the old City and Jazz shares almost everything, the new City and Jazz is different as night and day. Show me what part of the new City or Jazz (picture above) that shares any resemblance… I dare you… Now, show me what part of SX4 and Baleno that shares any resemblance… Okay, let’s not be cruel, but come on, SX4 and Baleno shares basically everything… Now my nephew even called Baleno the new Jazz with ass (as it is the same car with SX4 + trunk). Toyota does this with the new Yaris and Vios, but with better cladding and nicer retooling… You still can see similarities, but not as blatant as the new SX4 and its sedan version. Suzuki off course does it with reason, making the SX4 sedan (Baleno) as SX4 with trunk equals not much messing around in the factory floor, making economy of scale thaaaaaaaaaaaaaaaaaaaaaat much easier.

Not a single damn thing is similar between the two cars

Now what of the new City? It doesn’t resemble a Jazz in any nights, even after hard frat party. It just different. The new Jazz might still looks like a mini MPV, but the new City just looks like a regular old sedan. Just look at those A pillars people! Now tell me if Honda Jazz was used as the base design for the City… Where in the Jazz you have that side glass next to the sideview mirror, the City has no such thing. Even the mighty Toyota designs Yaris and Vios A pillar with strong similarity. As we know, A pillars define the base model of a car that is derived from. Case in point, the SX4 and SX4 sedan shares exactly the same A pillar, and look what my nephew called the car (hint: above). If A pillar is not a strong enough indication… Look at the body lines… The line that goes from the rear door handles slopes toward the front of the car on the Jazz, where as it’s dead straight on the City.

So what’s on the inside? Yaris and Vios shares that funky center dashboard, SX4 and Baleno shares that simple and mysterious dash… But the new City? Does it share anything with the new Jazz? Well… No and No. Where the Jazz dash looks like a funky new age, or in short, a cheap miniature dash of the Civic, the City’s dash looks surprisingly different. Unlike the driver oriented dash design of the new Jazz, where each knobs are placed right next to the steering column, the City control knobs are placed dead center on the dash. City’s silver accented center dash also differs with Jazz’s straight simple center dash design… …So? So!? So, new dashboard means another shot on the economy of scale knee cap. No way in hell Honda will able to streamline two different dashboard molds under one production roof.

So people… When you look at the City’s new design (and price), do remember… IT IS NOT a Jazz/Fit with trunk anymore, it’s a totally new car, a car made of mating Honda global small compact platform with the hopes of Honda fans all around the world… Errr… Around the world? Yup dear readers, Honda made the City a global car now. Our small ASEAN-Japan only sedan is now a global car, no longer exclusive for the squinty eyes (that’s a joke for Asians), Honda is selling the City to Europe and anywhere Honda could spread its hefty development and production costs.
In the end, City’s high price tag is attributed to several factors…

New engine and transmission development cost.

New design and factory retooling cost.

The last… And this is just locally… High foreign currency exchange rate. The city is fully imported, and thus, with current global economy uncertainty, Honda shoot high currency exchange rate to protect its selling margin.

So… Is Honda to blame? All I see is that, Honda answers the critics by designing the City from the ground up. The high expense is just one outcome of that… Like the elders said, you can’t satisfy humans. If Honda wanted to cut costs, they could, and what will the city look like? A Jazz with ass again? Surely something that will involve another round of ridicules from the competitors and the general public. However, Honda does listens to its customers, and still they got a beating in the ass. To hell with nay sayers… If you can’t afford it, buy a tata Nano.

Edit: 23-12-2008 : I happened to stumble upon Paultan’s entry about Malaysian’s Honda City… Lo and behold! The car is actually more expensive there compared to Honda Indonesia City. Starting at 84980 Ringgit, and topping at 89980 Ringgit, it equates to 284 million Rupiah, much much more expensive than the 260 million Rupiah of Honda Indonesia most loaded City. Sure people are clamoring about Honda Thailand sells the City at about 220 million Rupiah, or 690 thousand Baht… But do you guys knows about local automotive taxes? Well… It’s expensive in some part of ASEANs…

Surely though, the fans and those who appreciates engineering will buy the City, although with slightly less smile, I’m sure. It’s when they experience the Honda quality and that particular Honda engineering, then, they will take noticed that every penny is worth it.

… Me? What I drive? I drive one of the car pictured above, and it’s not a Honda… I just have Hondamentalism.

Pictures are taken from Autoblog, Honda of Japan website and various sources

Yup, some of my friends also points out the City price on Thailand. But do note I also wrote about Honda Indonesia shooting high foreign exchange rate because the car is imported. To guard itself against adjusted and the seemingly volatile exchange rate, HI just probably playing it safe… To much dismay of the masses.

About R&D stuff… Is it so that Honda doesn’t have any high R&D cost for the new City? Frankly I didn’t know, I wrote based on common sense that the current generation City has… Like what… Everything changed… At least if we follow the basic economy of scale rule, Honda is starting from zero again for its new compact city cars, namely Fit/Jazz, City and Freed.

Suzuki basically using a near decade engine on its Swift/SX4 and basically the same gearbox found on the 2003 Aerio on the new 2008 SX4 (my current ride). If that’s not one of contributing factor why Suzuki cars are more affordable than any of its competitors, then, economy of scale is just a hullabaloo…